Pharmaceutical company being pressured to ease monopoly grip on drug

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SAN FRANCISCO — Roche AG says it will build a U.S. plant to make more of its anti-bird flu drug Tamiflu, but that promise failed to tamp growing international pressure on the Swiss drug giant to ease its monopoly grip on the drug.

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European Union foreign ministers on Tuesday called bird flu a global threat following the discovery of new cases in Greece, Romania and Turkey in recent days, which led to bans on poultry from those countries.

Meanwhile, demand for Tamiflu is far outstripping Roche’s ability to make it.

Some 40 countries are scrambling to create Tamiflu stockpiles to treat millions if a pandemic occurs and there’s growing international pressure to ignore Roche’s patent rights and manufacturer inexpensive generic versions.

Thailand has announced its intentions to do just that and India-based Cipla Ltd. said it will be ready to ship generics next year, though it said Tuesday it will seek a license from Roche.

As migrating wild fowl have spread bird flu from Asia to Europe, fears have intensified that the virus may mutate into one that can be easily transmitted among humans.

Global health experts fear bird flu, which has swept through poultry across Asia since 2003 and killed at least 63 people, could be the start of a worldwide epidemic.

While current flu vaccines offer no protection against bird flu, lab and animal experiments have shown Tamiflu appears effective against it, and doctors in Asia have already been using the drug to treat infected people. Tamiflu makes symptoms less severe and shortens the duration of the illness by two days.

Roche, the sole manufacturer of Tamiflu, has ruled out relinquishing its exclusive patent rights on the drug to ease the crunch. But for the first time, the company said Tuesday that it was seeking other companies to help speed up its production.

“We are prepared to discuss all available options, including granting sub-licenses, with any government or private company who approach us to manufacture Tamiflu or collaborate with us in its manufacturing,” said William M. Burns, chief executive of Roche’s pharmaceuticals division.

Until Tuesday, Roche had insisted it would not allow anyone else to make Tamiflu as sales of the once-obscure drug’s sales have skyrocketed from $76 million in 2001 to an estimated $700 million this year.

Roche’s willingness to begin negotiating with other companies did little, however, to bolster the company’s sagging public image and many critics remained skeptical of the company’s intentions.

Roche is now being compared negatively to Bayer AG, the maker of anthrax treatment Cipro. In late 2001, as governments scrambled to stockpile Cipro in the face of U.S. anthrax attacks, Bayer initially refused to disclose its production capacity or enter into reimbursement negotiations.

Roche has steadfastly declined to discuss how many doses of Tamiflu it can produce and where exactly it manufactures the drug.

In announcing the new U.S. plant on Tuesday, Roche refused to say where it would be located, citing security concerns. Nor has it said when new Tamiflu capsules will be produced in the United States.

“It’s a very complicated drug to make,” said Kim Elliott, deputy director of Washington D.C.-based nonprofit Trust for America’s Health. Elliott said it will take about a year for Roche to deliver U.S.-manufactured Tamiflu.

Department of Health and Human Services Secretary Michael Leavitt has called for a Tamiflu stockpile to treat 20 million Americans, yet there are only enough pills on hand to treat 4.3 million people.

Still, Elliott said that the federal government has not formally contracted with Roche to buy the remaining 15.7 million doses, raising the prospect that any Tamiflu made in the United States could be shipped overseas.

While U.S. government officials such as Sen. Charles Schumer, D-N.Y., called on Roche to voluntarily farm-out manufacturing help, others called on governments to issue “compulsory licenses” to generic makers without Roche’s consent.

“Public health should come first and the patent holder’s commercial interests should come second,” said James Love, head of the nonprofit Consumer Project on Technology in Washington D.C.

Generic versions are expected to be less expensive than what Tamiflu charges in the developed world.

A 10-pill course of the drug can cost as much as $60 in the United States, making it too expensive for the Southeast Asian nations where the bird flu originates.

In a related development Tuesday in Washington, the Senate Health Committee approved legislation designed to boost production of medicine necessary in the event of a pandemic or other epidemics. The bill would create a new agency to coordinate pandemic preparedness. The agency would recommend promising medicines the government should stockpile.

The bill would also grant immunity from civil lawsuits to those companies that manufacture and distribute medicine used for fighting a pandemic or epidemic. It also would lengthen the time in which manufacturers hold monopolies for certain drugs, raising concerns from some lawmakers that the bill could increase drug prices for consumers.

U.N. Secretary-General Kofi Annan said this month that usual patent rules may have to be suspended if there is an outbreak of the disease so that other companies could jump in and make the medicine.

In 2001, the World trade Organization in response to high cost of AIDS drugs created new rules that allow governments to ignore patent rights to combat a public health crisis.

Tamiflu was invented in 1996 by scientists at Foster City-based Gilead Sciences Inc., which quickly sold all commercial rights and manufacturing responsibility in exchange for annual royalties to Roche, which assembles various parts of the capsuled drug in 13 locations.

In June, Gilead charged Roche with failing to adequately promote and produce the drug and invoked a contract clause to demand the return of all commercial and manufacturing rights. Roche has denied the charges.